State Funds First Scene In A Brighter Film Industry Picture
Written by Michael Lewis on May 21, 2009
By Michael Lewis
Florida’s doubling of filming incentives is doubly welcome. We need the economic shots as well as the camera shots.
But it’s just one in a series of steps vital to lure filming. Incentives alone are a losing game.
The state now can pay up to $8 million to a film or television production. Until this month it had just $5 million in all, down from 2007’s $25 million. Now the Legislature has bankrolled $10.8 million, which can make a few more cameras roll.
Incoming filming work adds high-paying jobs and spending by crews and casts, boosts our image and offers the intangible of seeing local settings in television shows, videos and films.
But true economic impact is vague, because proponents toss out figures ranging from modest to unbelievable. If you think movie previews hype films, look at some estimates.
Since Florida began paying film rebates, one report puts the statewide four-year industry impact in wages, products and services at a very credible $256 million — $64 million a year.
In 2007, as incentives peaked, the Miami-Dade County film office reported a $153 million industry impact just in the county, including $13 million from feature films and $77 million from TV shows.
In 2004, before incentives blossomed, that office reported $208 million impact. But in its business development plan that year, the office said the industry had a $2 billion annual county impact, providing nearly 3% of our jobs.
Today, proponents say the industry generates $17.9 billion a year statewide, with 207,000 industry and related jobs producing $498 million in tax revenue.
But when they went en masse to Tallahassee in March to seek more incentives, they said we get back $7 for each incentive dollar. That means $35 million in tax revenue this year, $75 million next year.
Which sets of widely divergent figures do we believe?
While the industry is clearly vital, we take impact numbers that it throws around with skepticism. Maybe it’s like when a city hosts a Super Bowl — accept impact figures only after you’ve moved the decimal point to the left.
Whatever the value, we want the film business. Cutting incentives from $25 million to $5 million cost Miami Beach a $20 million project, according to its Film and Event Production Manager Graham Winick.
So here’s good news out of bad: a film OK’d for incentives just dropped out, so $1.5 million more is available July 1 — and the project can also vie for next year’s $10.8 million. (Details: www.filminflorida.com)
But no matter how we add incentives, Florida can’t lead all 41 states that offer film cash. Someone can always beat our offer.
One reason: some give credits on personal income tax that filmmakers can sell to individuals. We have no personal income tax, so we can’t play. The Screen Actors Guild lists incentives of every state — there are no secrets — and we’ll never win if the only tool is the handout.
How could we compete with California, which set up a five-year, $500 million incentive pool to win back filming?
If a film project can succeed only the way some real estate developers used to — totally on OPM, or Other People’s Money — incentives become bribes. It would be like paying conventions to meet here. We’d be buying an income blip that creates no permanent jobs.
The industry failed in the Legislature to win unlimited tax-credit incentives. Productions would get rebates on qualified spending and corporate income taxes. That’s done in 21 states. We’ll see a re-run on that effort.
But we can’t win on handouts alone, trying to match states that pay up to 10% of film production costs. That would turn budget-challenged Florida into a film investor with no possible profits, an angel without a hope.
Our incentives must merely sweeten deals. Because welcome as the doubling of incentives is, and welcome as even more would be, reliance on them as our top sales tool will fail.
Our primary problem is not slim incentives. The county’s film development plan cites seven barriers to more film projects. Incentives are only one. That leaves six that don’t require state handouts.
The others are insufficient access to funding and distribution mechanisms, relatively high labor and location costs, a difficult union environment, lack of skilled labor and training, few high-profile industry players and resistance to location production.
That’s plenty to address without just throwing money at the problem.
But we do hold key cards in the location game. The county plan sees our most important opportunity in a Spanish-language market, capitalizing on natural ties to Latin America and Spain. States like Michigan with huge filming incentives can’t compete for that market.
We can capitalize on year-around outdoor shooting, great locations and Miami’s hot global image, and leverage our county and city film offices as they advocate for the industry, make locations easy to find and use and cut red tape. Again, other states can’t pay enough to top these.
So why play the top-bidder game? That will never be our strength.
Our leverage, unfortunately, is diminished by too few sound stages. We’ll have one fewer when Burn Notice finishes its season.
The TV series, which got about half the state’s $5 million incentives this year, has spent $28.6 million here in two years and is on track for $17 million more in the third.
It’s been filming in the Coconut Grove Convention Center. But, in testimony to the city’s vision, the company must speed its work and get out so the city can tear down its center and replace it with vacant land.
No incentive bonanza could make up for this economic anti-development policy.
Beyond getting commissioners to understand the film industry’s big impact — anywhere from a statewide $64 million to $17.9 billion a year, your choice — our county should unite to ensure that the industry has an environment in which it can thrive.
Because Florida can never pay enough to bribe the industry to work here. Incentives alone only go so far.